What should a corporation focus on to manage set-up costs?
A)Batch-level costs incurred per set-up-hour
B)Number of units included in each production run
C)Number of set-up-hours
D)Both A and C are correct.

Question

Quizplus · Accepted Answer

Batch-level costs incurred per set-up-hour (choice A) and number of set-up-hours (choice C) are both important factors in managing set-up costs. By analyzing the costs associated with each set-up hour and minimizing the number of set-up hours required, a corporation can reduce overall set-up costs. Similarly, by maximizing the number of units included in each production run (choice B), a corporation can spread the cost of set-up over a larger number of units, reducing the unit cost and optimizing production efficiency. Therefore, focusing on both choices A and C would be the best option.

What Should a Corporation Focus on to Manage Set-Up Costs